TRENTON, N.J. – Legislation authored by Assemblywoman Victoria Flynn increasing the competitive advantage of New Jersey-based insurance companies nationally while potentially reducing policy costs for Garden State residents, passed the Assembly on Thursday.
Flynn’s bill (A4785/S3409) would allow for higher foreign investment limitations, thus allowing New Jersey insurance companies to greater diversify portfolios overall. The legislation would level the playing field for New Jersey insurers as companies in 36 other states across the nation have already been granted the same opportunities.
“Limiting foreign investments for insurers only increases the cost of insurance for policyholders here in New Jersey and contributes negatively to the cost of running and building an insurance business. I am pleased to join my colleague Assemblyman McKeon across the aisle to take this step towards making New Jersey more affordable for its residents and more business friendly for the insurance industry,” Flynn (R-Monmouth) said.
Flynn’s bill would allow insurance companies to invest up to 30% of assets in foreign countries that have received a high rating from an independent, nationally recognized American rating agency. Companies could invest no more than 10% in any one country.
“Any time we can allow insurance companies to meet their obligations to policyholders in a more cost-effective way is a win for New Jersey,” Flynn explained.
The largest foreign markets for U.S. insurance companies are the United Kingdom, Canada, Australia, the Netherlands and France. The most common investments for insurers include debt securities, such as bonds, and equity securities, such as stocks and mutual funds.
“Expanding opportunities for more diversified strategic investments serves the interests of both New Jersey insurance companies and policyholders,” Flynn said.